Cisco to cut 10,000 jobs or 14pc of its workforce

Networking giant Cisco is believed to be planning to cut as many as 10,000 jobs, or 14pc of its workforce. These include early retirement packages for 3,000 workers.

The company is planning to make savings of US$1bn in costs after warning in May it needs to trim its workforce.

The company is trying to right its ship and is exiting unprofitable businesses. For example, the company shuttered its Flip digital camera business in April after it was apparent that smartphones had made that particular market redundant.

Cisco is also shedding unprofitable businesses in order to stave off competition from Huawei, Hewlett-Packard and Juniper Networks, which are making significant inroads into its traditional marketshare of switches and routers.

It is expecting cost savings of between US$500m and US$1.1bn in the fiscal fourth quarter.

Cisco revenues are forecast to rise 7pc this year to US$43bn instead of the 11pc growth it enjoyed in 2010.

Analysts suggest Cisco consolidates its focus on traditional areas of strength, like routers and switches, as well as streamline and reorganise its management structure.